Question - The loan department of Calgary Bank uses standard costs to determine the overhead cost of processing loan applications. During the current month, a fire occurred, and the accounting records for the department were mostly destroyed. The following data were salvaged from the ashes.
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Standard variable overhead rate per hour
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$8
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Standard hours per application
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2
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Standard hours allowed
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3,060
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Standard fixed overhead rate per hour
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$7
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Actual fixed overhead cost
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$22,260
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Variable overhead budget based on standard hours allowed
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$18,700
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Fixed overhead budget
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$22,260
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Overhead controllable variance
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$1,400 U
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(a) Determine the following.
(1) Total actual overhead cost
(2) Actual variable overhead cost
(3) Variable overhead costs applied
(4) Fixed overhead costs applied
(5) Overhead volume variance
(b) Determine how many loans were processed.